USAID Institutional Capacity Building Grant, World Vision US Preventive Speakers Series: HIV/AIDS & Nutrition Tuesd

1. “Value” in Value-Added Food Processing A Commercially Sustainable Business Model for Enriched Ready-to-Eat-Foods Land O’Lakes International Development Rolf Campbell, consultant USAID Institutional Capacity Building Grant, World Vision US Preventive Speakers Series: HIV/AIDS & Nutrition Tuesday, December 11th 9:00 am until 1:30 pm Ebenezers Coffeehouse Basement Level 205 F Street, NE Washington, DC 20002

2. “Value” in Value-Added Food Processing Background Introducing a nutrition product development activity in Zambia. Who: Land O’Lakes International Development supporting 3 Zambian food processors with a food industry advisor. What: Assist food processors over 2 years to develop and commercialize nutrient enriched foods that are already familiar in the markets and in the diets of Zambians. Where: Zambia: Lusaka, Ndola Goal: Increase the available options for nutritious, processed and packaged foods for people living with HIV/AIDS and others who will benefit from better nutrition.

3. “Value” in Value-Added Food Processing A Commercially Sustainable Business Model for Enriched Ready-to-Eat-Foods • Project Background • Rationale • Value Added Processing: Potential Benefits for Consumers • Where Zambians Obtain their Food – the “Food Basket” & Sources • A Commercially Sustainable Business Model • Commercial Success Factors • Product Design Criteria & Product Descriptions • Product Development Status • Project Outcomes with Food Processors • Relevance, Benefit for PLWHA • Remaining Project Hurdles, Critical Outcomes • Contact Information

4. Background of Land O’Lakes ICB Nutrition Sub-Activity • April 2004, Land O'Lakes begins implementing a $12 million multi-year Title II program in Zambia working with smallholder dairy producers, to build their access and supply to markets, support the milk processing sector, and collaborate with food distribution to NGOs/PVOs.Using a Title II ICB Grant (USAID Office of Food For Peace), Land O'Lakes has embarked on a very small sub-activity assisting Zambian food processors to develop nutrient enriched foods • Conducted data base research through a desk study, literature review, interviews, and field work in Zambia; • Consulted with NGOs / PVOs implementing PEPFAR and food aid programs that address nutritional needs of PLWHA in Zambia • Engaged in ongoing work with Zambian food processors selected for their capacity to develop, produce and market enriched ready-to-eat foods. • Working with these Zambian food processors to commercialize their enriched foods in 3 market channels • NOTE: Product development costs and marketing are entirely funded by the Processor businesses who also control the rights to their proprietary formulas and processes.

5. Rationale: The Call to Action Host country Food Processors are accountable to improve the nutrition impact of their products in the diets of consumers in their country. Under-nutrition and the presence of food aid should signal a challenge and an opportunity for processors in countries receiving US commodities (such as wheat, maize, oil, legumes) and “value added” fortified blended foods (such as fortified corn-soy blend, wheat-soy blend). Because the ultimate aim of foreign assistance - including food aid - is to address a temporary gap, not to become an endless alternative to long term self-sufficiency.

6. Rationale • People require and acquire food daily from a wide variety of sources: (the food basket, grazing). Processed, packaged foods are one of these sources. • Ready-to-eat processed, packaged foods can be important, convenient sources of nutrition. • This puts the food industry in a position to contribute positively to the nutrition requirements of their consumers. • Small adjustments to the formulation of consumer foods can improve their nutrition contribution to the diet for little increase in cost. • Commercially processed foods can be adapted to Food Assistance and Institutional nutrition requirements. • Commercially viable (market demand) enriched foods create their own incentive for a “sustainable” food supply when: they benefit consumers while returning profits to processors.

7. “Value Adding” Food Processing POTENTIAL Benefits for the Food Supply • Commodity assembly, storage, protection, handling • Cleaning, grading, sorting, standardization • Safety analysis for pathogens, culling for pests, foreign materials, cleanliness • Drying, milling, pealing, de-hulling, crushing, grinding, pressing • Intermediate bulk packaging • Refrigeration, freezing • Pre-cooking (& instant-ized) ready-to-eat foods contributes convenience, reduces or eliminates need for cooking fuel, time preparing food. • Thermal processes: Pasteurization, sterilization, aseptic filling • Pickling, salting, fermentation, culturing • Filtration, sifting, isolation and concentration of food components • Formulation: blending, combining foods, seasoning, adding performance factors like enzymes, nutrition, and culinary appeal • Fortification with vitamins and minerals • Consumer Packaging protects, contains, portion controls, and identifies contents with detailed product information as well as identifying the manufacturer accountable for the contents. • Concentrate food nutrients and caloric density: people to ingest better nutrition while eating less volume. • Processed shelf stable foods remain fresh, safe, with nutrients intact, allowing for distribution and longer storage far away from manufacturers even into remote areas

8. Processed, Packaged, Ready-To-Eat-Foods: POTENTIAL Values to the Consumer • No or reduced cooking (cooking heat / time) – pre-cooked • Improved Digestibility / Bioavailability of pre-cooked nutrients such as proteins and carbohydrates • Convenient – no preparation including sorting, cleaning, peeling, grinding, mixing, cooking • Often hand-held, portable, and portion controlled • Nutrient preservation (reduced thermal processing) • Nutrients / foods can be combined & balanced • Increased Nutrient concentration or density • Safety, sanitation of food • Packaging for containment, protection, storage, re-closing, identification, portion control

9. Food and Nutrition People do not seek or eat “nutrients”, we eat foods. Most people do not eat one food; we eat meals. People are seeking foods and making food choices continually. The only nutrients that count are in the foods people CHOOSE to eat. Therefore: Make a variety of foods that people are choosing to eat - more nutritionally complete.

10. The “Food Basket” Partnership For Delivering Improved Nutrients Fresh “Raw” Foods Commercially “Processed” & Packaged Restaurant, Street & Away from Home “Prepared” Nutritious Foods Home Kitchen “Cooked”

11. Goal: Target Places Zambians Procure Their Food

12. Three Market Demand Channels - Three Market Supply Channels 1 FOOD ASSISTANCE CHANNEL HUMANITARIAN: WFP, NGOs, PVOs, buy and distribute ENRICHED FOODS Forward Contracts For Enriched Foods Aggregated Demand For Enriched Foods FBOs and CBOs Demand 2 RETAIL CHANNELS ENRICHED FOODS bought Directly By PLWHA and other consumers ZAMBIAN HOUSEHOLDS, PLWHA Multiple Access Channels for ENRICHED FOODS ZAMBIAN FOOD PROCESSORS Manufacture and sell more ENRICHED FOODS 3 INSTITUTIONAL CHANNEL WORKPLACE, HOSPITALS, CLINICS, SCHOOLS buy and distribute ENRICHED FOODS Demand Forward Contracts For Enriched Foods Aggregated Demand For Enriched Foods

13. Some Organizations Consulted by the Project, with Possible Future Interest in Foods NGO, PVO, CBO, Donor Network of People Living with HIV/AIDS (NZP+) Project Concern International (PCI) RAPIDS Catholic Relief Services Clinton Foundation WHO USAID And many others Institutions / Food Service Hospitals CHAZ: Church Hospital Association of Zambia Private Hospitals Government Clinics Public Schools Private Schools Workplace and commissaries Military Airlines

14. Leveraging the Processing Sector for Better Nutrition: Advantages of a Commercial, Sustainable Business Model • Processors utilize the Zambian ingredient supply chain • Enriched ready-to-eat foods become available across Zambia including high need areas that may not meet humanitarian food program inclusion criteria. • Processors employ existing warehouse and distribution capacity for their retail business thereby increasing reach into both rural and urban markets. • There is dependable Quality Control; their facilities comply with good manufacturing practices (GMP) • Processor technical expertise is increased and leveraged for the development and marketing of enriched ready-to-eat foods leading to ongoing nutrition products innovation that benefits all Zambians • Processors make capital equipment investments in response to market demand increasing long term food variety, quality, and availability • Processors continually work on their own “sustainability” as a commercial enterprise so that enriched ready-to-eat foods will be available over time throughout Zambia. • Enriched products (supplemental foods) may be transformed into a domestic food industry surge capacity available for high need food crisis periods.

15. Some Key Success Factors for Commercial Sale of Enriched Foods Market and economic analysis Set boundaries on selling price, cost of product to produce, buying intentions from key market channel leaders for these or similar replacement products Buyer and consumer education about the nutritional value of enriched ready-to-eat products. Customers and consumers must embrace the critical significance of choice: making enriched foods a regular part of their diet; the price/value of the products themselves (to deliver them this value); discretionary buying decisions over many marketplace alternatives (such as the existing non-enriched foods) Foods should deliver a nutrient-dense, balanced combination of macronutrients and micronutrients Measurably contribute to improved nutrition status when eaten under the right circumstances (adherence to diet, duration, amount consumed, other foods in the diet, physical condition, needed medical interventions). Nutrition experts must recognize the products’ nutrition advantage and consumers must experience the implied “product promise” of long term health, energy, and growth from improved nutrition.

16. Target Product Design Criteria Strive to meet guidelines for nutritional needs of Zambians including those PLWHA Conform to Zambian dietary practices Conform to National Food standards Meet “mass market” consumer expectations for price, packaging, and eating appeal Formulate (enrich), process, and packag based on principles of food and nutrition science and good manufacturing practices (“GMP”) When possible, be compatible with the operations and logistics of NGOs, PVOs, and their local partners that provide nutritional supplementation to PLWHA.

17. Product Description: Enriched Maheu Manufactured by Trade Kings, Lusaka, Zambia Enriched milk-maize-soy, fortified drink: • Culturally familiar; ancient tradition as a nutritious drink in Zambia; emotional value: (“my maheu”), sought out by all ages. • Plain Maheu with added milk solids, fat energy, soy protein, vitamins. • Shelf stable without refrigeration for 8 months • Ready to drink from either 300 or 500 ml plastic bottles. • Nutrition quality, a balance of micro and macronutrients in fluid form • Digestibility: processing includes the use of enzymes which break down grain starches for ease of digestion. • Portable, can be carried and drunk anywhere, any time • Hand-held, convenient for children • Can be to drunk through an elbow straw while lying down • Soothing, slightly viscous, and easy to drink for anyone with mouth or teeth problems or swallowing difficulty • Portion controlled packaging that is easy to open and drink from • Ready-to-drink, no preparation • Delicious and familiar food, adds variety to the diet • Convenient for ready between meal snacks when medications necessitates food intake • Contributes to “food water” re-hydration and enhanced nutrient absorption TRADE KINGS LIMITED For Samples or Quotation Inquiries contact: Mr. Winani - TEL: 00-260-1-286117; E-mail: tradekings@zamnet.zm; LUSAKA, ZAMBIA

18. Product Description: Enriched Sandwich Biscuit Manufactured by Sunrise Biscuits Ndola, Zambia Two enriched baked whole grain-based biscuits enclosing an enriched peanut butter based “cream” filling • Ingredients include: whole wheat, whole oats, soy flour, soy protein concentrate, peanut butter, milk powder, whey protein, vegetable oil, sugar, honey, vitamins, minerals • Nutrition quality and density, delivering balanced vitamins, minerals, protein, carbohydrates, fat, fiber, and energy in a compact and stable form • Portability: can be carried, stored, and eaten anywhere, any time • Shelf stability: 9-12 months depending on storage conditions • Hand-held, no utensils or bowl needed, convenient for children • Portion controlled packaging to protect the food, easy to hand out & open • Ready-to-eat, fully baked, no preparation • Biscuit becomes a creamy porridge when liquid is added – for spoon eating • They are a familiar food in our Southern African diet; such desirability encourages healthy eating and adds tasty variety to the diet • Offer a variety of 11 different nutritious foods we have assembled into a “Full Plate” for between meal & on-the-go nutrition supplementation – along with the fortification • Natural Foods: NO preservatives, artificial colors, trans fats, hydrogenated fats Sunrise Biscuits Company Ltd. For Samples or Quotation Inquiries, Contact: Mr. S. S. Langar Lukasu Road, Light Industrial Sites; P.O. Box 70506, Ndola – Zambia; Phone: +260-2- 650637 / 8; Fax: +260-2-650132; Cell: +260-955 434846; E-mail: sunrisebc@zamnet.zm

19. Sunrise Enriched Sandwich Biscuit Nutrient Contribution

20. Products Status and Next Steps Enriched Mahue Final formula confirmed. Being submitted to NFNC for acceptability opinion. Scale up runs and commercial samples to be produced in January. Retail launch planned for March. Enriched Biscuits Market ready. One order received from NGO; Retail launch being staged; Institutional client (private hospital) engaged in efficacy trial. Pro-biotic Mabisi Final formula being confirmed. Marketing strategy being developed for 3 channels. Product Technical Bulletin being developed. Scale up runs and commercial samples are pending.

21. Project Outcomes with Food Processors • Active interest and involvement in the nutrition of their consumers and the nutrition value / impact of their products. • Business Growth Opportunities & increased Customer Options • Technical know-how in food fortification with vitamins and minerals • Relationships with non-governmental (NGO) & community-based organizations (CBO) • Enhanced staff know-how, processing capabilities and quality control procedures • Product technical specifications, formulations, ingredients for nutrition products • Enlarged capabilities into nutritional product category • Relationships with Institutions for meeting nutrition requirements • Development of sophisticated nutrition product and nutrition promotion material • Increased collaboration with GORZ and other Donors in Zambia for contributing Zambian business-based solutions to the Zambian nutrition crisis

22. Food Processors: Getting Involved With Nutrition and HIV/AIDS • One of the Processors is now active on the National Food and Nutrition Commission sub-committee on HIV/AIDS and nutrition • One Processor is actively engaged with a private hospital investigating the benefits of buying nutrition supplements for patients receiving treatment who also show symptoms of moderate malnutrition. • Another Manager has made visits to a major HIV/AIDS public clinic with a life changing effect for him - and through him, for the Business Owners • A third is actively looking for using distribution channels that will access rural Zambians people most in need of their form of product. • All three are open to the proposed creation of HIV/AIDS training programs for their staff. This will begin in 2008.

23. Potential Benefits for People Living with HIV/AIDS Three forms of foods that are familiar, widely consumed, and found throughout Zambia, will now be enriched and more nutritious. Promotion of these products in the markets will contribute to consumer knowledge about proper diet and better nutrition generally. Zambian processors will be manufacturing and offering enriched supplemental foods for sale not only at Retail but also to Institutions, and to NGOs, PVOs, CBO’s Sustainable Food Options: All of the above was developed by the food businesses and will stand – or fail - on its own based on value chain incentives: Consumer (buyer) Demand, Supply, Competition.

24. Remaining Hurdles / Critical Outcomes • Support to Processors for achieving sales in all 3 market channels and earning returns on their investment • Evaluating / measuring long term value of the products for consumers • Receiving VAT relief (17.5%) from GORZ for enriched products and duty relief for nutrient ingredients – passing on the savings to consumers • Nutrition Promotion and Education campaigns for Trade and Consumers • Ongoing product optimization and innovations; Quality Control Procedures • Processor sponsored HIV/AIDS employee awareness and service programs

25. Project Contact Information In Africa – Todd Thompson Land O’Lakes Country Director, Zambia, Africa; E-mail: todd@landolakes.com.zm; Phone: 260 21 1 263 929 / 30; Fax: 260 1 265 053 In USA – Mara Russell Land O’Lakes Title II Director, WDC; E mail: marussell@landolakes.com; Phone: (703) 524 1739; Fax: (703) 524 3668 Rolf Campbell consultant; E mail: rolf.campbell@att.net; Phone: 612 839 4050; Fax: 612 823 4688

26. 11 Places Zambians May Find Food